Freelancers are an important, but hidden, part of the small business population and one that sometimes is largely misunderstood.

Recent media coverage of the gig economy has created the perception that most freelancers are either driving for Uber or performing household errands through TaskRabbit. But these activities are actually a very small subset of self-employment, which covers a full range of skills and income levels.

While independent work is prevalent in the construction, cleaning, and transportation services, it is also widespread within certain types of specialized knowledge-intensive occupations. For instance, a psychotherapist today can join a dedicated digital platform that connects him/her with people seeking therapy. Requirements range from holding a phd degree to being professionally qualified.

What we know from the numbers

Data from the Labour Force Survey of Eurostat shows the biggest increase in self-employment in the last decade has been in professional, managerial, scientific and technical occupations. These are freelancers, some of the highest skilled self-employed groups and the ones who contributed to more than 9 billion euro in services trade to the GDP of the European Union in 2014.

"Freelancers (also called Independent Professionals) are the fastest growing segment of the European labor market and a key social and economic factor in all Member States of the European Union".

From 2004 to 2016, the EU28 freelancers’ population grew from 6.2 million to nearly 10 million, a 45% increase, whereas from 2000 to 2014 the growth was even higher: 82.1% (Eurostat, 2014).

United in diversity

Freelancers are heterogeneous, a very diverse group in a constantly evolving environment. They comprise many different types and work across all industries, from artists and web developers to social workers, accountants and opera singers. They include men and women and represent a diversity of ethnic and racial backgrounds. They live all over the country, not just in major cities.

The gig economy has accelerated the upward trend towards self-employment both for high and low skilled workers.

Recent research found that people are looking to find work on platforms to diversify their income stream, provide a backup in case they lose their main job, make money from a passion, learn a new skill and explore new career or business opportunities.

"Work that gives supplementary income has created a large number of “part-time” self-employed or moonlighters. However, they still represent a minority in the self-employed labour market".

Part-time self-employment is elusive, an area where official statistics are lacking and where European governments should do more to track developments.

What policymakers should do

Labor market policies developed for the industrial age often fail to apply to the world of independent work.

Governments need new metrics to track the number of hours worked rather than jobs created, as to gauge the strength of the economy.

"Policymakers need to obtain better data on the independent workforce through new and more regular surveys, with up-to-date categories and criteria".

One of the biggest gaps is that official labor market surveys collect data on primary occupations—so by definition, they ignore activities that generate supplemental income (part-time self-employment).

Official surveys also fail to track whether independent work is undertaken by choice or out of necessity—a critical piece of knowledge for understanding whether workers are being “pulled” or “pushed” into independence.

Definition, recognition and simplification come first

As a precondition to source better data on the freelance population, governments need to define freelancers as a unique subset of micro-enterprises for the purpose of the European SMEs definition and recognise them as economic agents in their own right.

They should formulate simplified policy with impact assessments adapted to self-employment (thresholds and exemptions as applicable) and the right incentives for freelancers to become and remain self-employed and for companies to engage them.

They also need to foster a policy environment that promotes a variety of contractual arrangements as a way to increase labour market participation and inclusion.

"Despite their growing numbers, there’s very little discussion of freelancers’ interests in public policy. This is a major oversight of one of the biggest driving force of the EU labour market and economy".

As elections are looming in a number of European countries, it is also a lost opportunity for political establishments to gather support of a large and engaged constituency, to whom elected officials should pay more attention.

If you’re a college student with a big idea, there’s no reason to wait until graduation to start. Starting a business in college will not only help you get a head start in your industry, but it’s also a way to earn some extra cash. A lot of students take part-time jobs bartending or working […]

This is an abstract of a presentation on WorkerTech I’ve delivered at the Finnish Institute of Occupational Health on August 9, 2019 in Helsinki. What is WorkerTech? Digital service offerings that harness technology to provide the self-employed with personalized benefits and greater access to protections and rights. They combine the flexibility of self-employment with the […]

Freelancers will regularly need to pitch ideas or projects to potential clients. The best way to do this is by making up an excellent business proposal that could make your idea easier to sell. How do you create a better proposal that has a higher chance of success? The key is to focus on your […]

If there is anything that doesn’t change in this world, it’s the change itself. That’s why no matter how hard it can be, we should always find a way to accept and live with any change. This is what is happening with new technologies like blockchain. Other than being the technology behind different digital currencies, […]

Xamk’s international Summer Term takes place for the first time this year in Kouvola and Mikkeli campuses. In Kouvola it consists of 5 courses, and runs from May 6 to August 23. The general theme of all the courses is Artificial Intelligence and I had the chance to interview one of the lecturers, Marco Torregrossa, […]